A thing called capacity—and why it could be devastating to our power bills

When CUB threw its support behind the Clean Energy Jobs Act, the watchdog said one of the biggest reasons is an ongoing battle with fossil fuel generators in a special electricity market called the capacity market. If we don’t do something, this could cost most electric customers in the state up to $500 million a year in higher electric bills.

You may not know it, but EVERYONE pays for “capacity” on their electric bills. Here’s what you need to know—and why you should support the Clean Energy Jobs Act.

What is capacity?

Not only do you pay for the power you use now, but you also pay for power you could use in the future. Capacity refers to extra payments consumers give power plant operators for the commitment to have enough electricity available if demand suddenly spikes. (Think of a hot summer afternoon, when everyone blasts the AC.)

The PJM power grid stretches from Illinois to the East Coast.

The price for capacity for ComEd customers is determined through auctions run by PJM Interconnection, the power grid operator for northern Illinois and all or part of 12 other states and Washington, D.C.. (Ameren’s market is run by a different power grid operator.)

How does capacity affect my bill?For most customers, capacity charges are embedded in the electricity supply charge on your power bill. While actual electricity prices have been relatively low in recent years, capacity has become a bigger and bigger part of your bill, and is now roughly 21 percent of the supply charge, according to the Illinois Commerce Commission. (By the way, alternative energy suppliers as well as ComEd buy electricity on this market. So you won’t escape capacity charges by changing suppliers.)

CUB has long said that capacity market rules are stacked against consumers, causing us to pay higher bills for more capacity than we actually need. But a new plan pushed by PJM and fossil fuel generators could make it even worse.